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FASB Removes Outdated SEC Interpretive Guidance for Financial Instruments Standard

The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) No. 2018-04, Investments — Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273, which eliminates out-of-date interpretive guidance from the Securities and Exchange Commission (“SEC”) on financial instruments. The change to U.S. GAAP was made in response to ASU No. 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The U.S. GAAP update is highlighted in Staff Accounting Bulletin (“SAB”) No. 117, in which. Read More.

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SEC Guidance on Tax Reform Added to FASB Codification

Last month, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that amends certain Securities and Exchange Commission (“SEC”) guidance under Topic 740 related to the Tax Cuts and Jobs Act. ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, adds guidance to the FASB Accounting Standards Codification that answers questions regarding how certain income tax effects from the Tax Cuts and Jobs Act should be applied to companies’ financial statements. The guidance also lists which financial statement disclosures are required under a measurement period approach. More on ASU No. 2018-05 is available on FASB.org.

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SEC to Help Companies Disclose Tax Reform Effects

At a recent SEC Speaks event in Washington, D.C., Securities and Exchange Commission (“SEC”) chief accountant Wesley Bricker told attendees that the commission intends to help public companies with disclosures on their periodic filings related to the impact of the Tax Cuts and Jobs Act (“TCJA”). In his remarks, Bricker referenced Staff Accounting Bulletin No. 118, (Topic 5.EE), Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which was issued in December 2017. The bulletin covers the judgments and assumptions that a company’s management must make when including the effects of tax reform into financial statements. It also. Read More.

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SEC Delays Compliance Date for Liquidity Risk Rule

The Securities and Exchange Commission (“SEC”) has postponed the compliance date for specific provisions in a rule requiring mutual funds to oversee their risk and ability to redeem investors’ shares. Announced as part of Release No. IC-33010, Investment Company Liquidity Risk Management Programs; Commission Guidance for In-Kind ETFs, the six-month delay gives fund companies additional time to classify risks in their investment holdings under Rule 22e-4 of the Investment Company Act of 1940. The new compliance date for larger fund groups is June 1, 2019, and the compliance date for smaller funds is December 1, 2019. The new compliance dates. Read More.

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JOBS Act Exemptions to Expire Soon for Emerging Growth Companies

Businesses that went public under the designation of emerging growth companies shortly after the JOBS Act of 2012 was enacted could soon lose their exemptions from the law. The five-year exemptions included in the JOBS Act, which curtails regulations for young companies that raise investor funds and encourages initial public offerings, are set to expire soon. Once the exemptions expire, hundreds of young companies will be subject to various accounting, disclosure and corporate governance requirements foreign to them. One exemption set to go away relates to Section 404(b) of the Sarbanes-Oxley Act. Section 404(b) requires an external auditor to review. Read More.

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Supreme Court Tightens Dodd-Frank Whistleblower Protections

In a unanimous ruling, the Supreme Court narrowed the definition of a whistleblower under the Dodd-Frank Act. The U.S. Court of Appeals for the Second, Fifth and Ninth Circuits had different rulings over the interpretation of the whistleblower protections, but the Supreme Court ultimately decided on a narrow definition. The decision stems from the case of Digital Realty Trust v. Somers, which involved the termination of former Digital Realty Trust vice president Paul Somers after he reported possible violations to management. Somers claimed that the Dodd-Frank whistleblower protections, which bar companies from retaliating against employees who report misconduct under certain. Read More.

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